The country’s largest lender, State Bank of India, has identified around 7 lakh accounts opened under Pradhan Mantri Jan-Dhan Yojna for providing overdraft facility to offer small personal loans, its chairman Arundhati Bhattacharya said on Wednesday.
Under the financial inclusion programme, the state-run bank has so far opened over 10 crore accounts.
“The 7 lakh accounts, which we have identified, are for giving loans for personal purposes, not necessarily for entrepreneurship. The people belong to low-income group and had opened accounts under Pradhan Mantri Jan-Dhan Yojna,” Bhattacharya said during an event organized by industry body Ficci.
Asked about the process of selecting the Jan-Dhan accounts for offering personal loans, she said, “They are basically all the people who have sufficient turnover in their accounts in order to get an overdraft.”
The size of the loans to be disbursed depends on the amount of turnover in their accounts, Bhattacharya said, adding disbursal of these small loans to the low-income group people is being carried out by business correspondents.
The SBI chairman said even after the ending of Pradhan Mantri Jan-Dhan Yojna, people continued to open 60,000 accounts at its branches per day for the financial inclusion scheme.
Backed by the upgradation of business correspondents model, the bank is now coming up with small value insurance, investment and flexible deposits products. Bhattacharya said technology was becoming a great enabler in reaching out to the people in the villages. Currently, cyber crime was an important issue of concern among the bankers, she
Talking about the challenges which Indian banking industry are facing at present, the SBI chief said liquidity and asset quality are two major risks. “Banks are now required to maintain LCR (liquidity coverage ratio) over and above CRR and SLR. Liquidity risk is the biggest risk which the banking sector was facing today,” she added.
Reserve Bank of India, however, relaxed Basel III-mandated liquidity coverage ratios for banks last month.